Fingolimod (I), chemically known as 2-amino-2-(2-(4-octylphenyl)ethyl)-propan-1,3-diol is a sphingosine 1-phosphate receptor modulator, administered as its hydrochloride salt (Ia) for the treatment of patients with relapsing forms of multiple sclerosis to reduce the frequency of clinical exacerbations and to delay the accumulation of physical disability. Fingolimod hydrochloride capsule with proprietary name ‘GILENYA’ and strength of 0.50 mg was approved by USFDA on Sep. 21, 2010 for oral administration.

Various researchers have attempted to synthesize fingolimod hydrochloride (Ia). However, these processes were fraught with impurity formation at various stages and more so during the condensation of 2-(4-octylphenyl)ethyl iodide with diethyl acetamidomalonate wherein the associated styrene impurity (II) was usually formed to an extent of 10-15%. This necessitated several purifications for the removal of (II) from the intermediate condensation compound (III) as well as the final product.

WO 2012146980 and Chemical & Pharmaceutical Bulletin, Vol. 56(4), pages 595-597, 2008 disclose that the prior art methods result in formation of impurity (II) during coupling of 2-(4-octylphenyl) ethyl iodide with diethyl acetamidomalonate in presence of sodium methoxide.
It has been found that the use of base during this step results in high concentration of impurities like styrene (II) and other associated impurities, which eventually gives low yield. The same observation was also made by workers in Synthesis 2000, 4, 505-506.
WO2013111162 discloses a process for preparation of fingolimod containing the regioisomeric impurity (Ib), wherein the disclosed method follows the multi-step process to eliminate the regioisomeric impurity from the fingolimod free base and its hydrochloride.

In order to circumvent the formation of the styrene impurity, Philippe Durand et. al., (Ref.—Synthesis (2000), (4), 505-506) employed an alternative route involving α-haloacetophenone derivative instead of 2-(4-octylphenyl)ethyl iodide. However, the method required an additional step involving reduction of the carbonyl group of acetophenone derivative in preparing desired intermediate like diethyl-2-acetamido-2-(4-octyl phenyl)ethyl malonate.
Chem. Pharm. Bull. 56(4)-2008, 595-597 discloses another method for minimizing the styrene impurity by subjecting the product containing the styrene impurity to Michael reaction followed by further reduction to yield diethyl 2-acetamido-2-(4-octylphenyl)ethyl malonate, the desired intermediate for preparation of fingolimod. However, this method requires an additional step of Michael reaction followed by reduction, which significantly increases the cost of manufacture on a commercial scale.
Journal of Organic Chemistry 69(11), 3950-3952, (2004) provides a process wherein coupling reaction of 2-(4-octylphenyl) ethyl iodide with diethyl acetamido malonate in N,N-dimethylformamide (DMF) as solvent to eliminate formation of styrene impurity. However, duplication of these experiments reveals that styrene impurity is still formed to the extent of 5-10%.
From the foregoing, it would be evident that there are no prior art methods, which limit or considerably reduce the styrene impurity (II) in a single step and preferably in the same step when it is formed. Therefore, it was necessary to develop a process, which would significantly minimize or eliminate the styrene impurity during the conversion of dimethyl-2-acetamidomalonate to dimethyl-2-acetamido-2-(4-octyl phenyl) ethyl malonate (III) which is then converted to fingolimod. The present invention provides a solution to the above problem by developing an alternative and efficient process to prepare diethyl 2-acetamido-2-(4-octyl phenyl) ethyl malonate (III) intermediate in which the styrene impurity is minimized below regulatory limits and provides fingolimod hydrochloride (Ia) with isomeric and other associated impurities below regulatory limits and without any requirement of column chromatography or repeated crystallization for reducing the impurity and obtaining the desired purity.